The COVID‐19 Pandemic and Its Impact on the Global Economy: What Does It Take to Turn Crisis into Opportunity?

Abstract The COVID‐19 pandemic broke out at a time when there were heightened uncertainties in the global economy. Understanding these uncertainties provides an important background for analyzing the impact of the pandemic on the global economy, assessing the effectiveness of policy measures in combating the pandemic and reviving the global economy, and predicting the trajectory of the economic recovery in the post‐pandemic era. We analyze how COVID‐19 would likely deepen an existing malaise in the global economy, and what could be done to address these problems while managing the economic recovery. We argue that three fundamental factors that could lead to a solid recovery in the post pandemic era are structural reform, new technology and re‐integration. They could be managed by instituting a new “global social contract.” Supported by strong public policies at all levels, especially at national level, these three factors could bring about the salvation of the global economy as it recovers or re‐emerges from the pandemic crisis.